FTC tells search engines to label advertising

Facebook introduced a search tool for its social network of more than 1 billion users, seeking to improve features to attact more users and advertisers.
Photo: Bloomberg

by
Edward Wyatt

Search engine companies should more clearly distinguish on their web pages between advertising, paid content and the results of an internet search, the US Federal Trade Commission has told two dozen search engine providers.

The commission made the statements, which update guidelines first laid out in 2002, in a letter it sent to seven general search engine companies including Google, Bing and Yahoo, as well as to 17 specialised search sites that focus on travel, shopping and local businesses.

Saying that the commission has noticed a decline in compliance with its 2002 guidelines, Mary K. Engle, associate director for advertising practices, wrote that “to avoid the potential for deception, consumers should be able to easily distinguish a natural search result from advertising that a search engine delivers."

Ms Engle cited a 2012 study by SEOBook, a search strategies company, which found that “nearly half of searchers did not recognise top ads as distinct from natural search results." Top ads are advertisements that appear immediately above the list of search results.

Those ads are often set apart by background shading, to distinguish them from other search results. But the FTC said that the shading was often too light and failed to differentiate the ads from nonpaid material. In addition, it warned, the formats used in one type of device — say, desktop browser pages — often did not work for different devices, like mobile smartphones.

Specialised search results — for example, from a search engine that focuses strictly on one industry, like airlines or hotels — are sometimes based at least in part on payments from a third party, the FTC said. “If that is the case, it is also a form of advertising and should be identified as such to consumers," the agency said.

The issue came up during last year’s FTC investigation of Google, when other companies accused Google of displaying shopping results based not on what would best suit a customer, but rather on the potential return to Google.

In a statement, Google said Tuesday that “clear labeling and disclosure of paid results is important, and we’ve always strived to do that as our products have evolved." Neither Google nor any other company was singled out in the FTC’s letter as a potential violator.